It is no longer guess work that Baidu Inc (ADR) (NASDAQ:BIDU) is joining the likes of Alphabet Inc (NASDAQ:GOOG)’s Google in making cars capable of driving themselves. However, the question that investors keep asking is whether the Chinese Internet giant stands any chance of success in autonomous car business. That question was recently answered by Baidu’s SVP of autonomous car, Wang Jing.
Analysts have also recently weighed in on Baidu’s self-driving car efforts and they tend to believe that the company has just as good chances in car business as Google.
Where Baidu sees strength and opportunity
$1.5 trillion opportunity
For Baidu Inc (ADR) (NASDAQ:BIDU), there is so much money to be made in the car business. The Chinese transportation industry is a more than $1.5 trillion market a year and the opportunity is growing. Baidu is imagining that if it were to only grab a slice of that money, it would be a huge boost to its topline and bottom-line numbers.
Home field advantage
Baidu Inc (ADR) (NASDAQ:BIDU) is aware that it is joining a crowded field where it will face off with more established and deep-pocketed rivals. However, the company is counting on its knowledge of the Chinese traffic situation to at least beat competition in the domestic market. According to Jing, Chinese roads are unlike U.S. roads, which explain why those who have spent much time abroad find problems trying to navigate local traffic. Therefore, robots trained in Chinese road situation should be able to outperform exotic technology. With that Baidu is confident of securing Chinese self-driving market from foreign invasion by the likes of Google, Ford Motor Company (NYSE:F) and Tesla Motors Inc (NASDAQ:TSLA).
To develop intelligent cars that can drive and part themselves minus human intervention, you need to have the right technology and massive amount of data to train the robots controlling the car. Given its position as the leading Internet search provider in China, Baidu Inc (ADR) (NASDAQ:BIDU) has more than enough data to train its self-driving cars. Additionally, the company continues to invest in deep learning as part of the efforts to develop the perfect technology for its autonomous cars.
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